Buying interest at The Clift, One Shenton

While the pace of transactions in the traditional prime districts of 9, 10 and 11 has slowed following the property cooling measures introduced by the government on Dec 8, that in the CBD area remains lively, especially for new apartment towers completed in 2011 such as One Shenton and The Clift. “It is quite interesting to see that the property prices in the CBD area are still holding up, at above $1,900 psf, considering the reaction towards the new cooling measures,” says Joelle Ng, group director of Huttons International. “While many are waiting for prices to drop before going back into the arena, it is quite unlikely to happen, especially for properties in the prime areas.”

Based on the latest caveats lodged and downloaded from URA Realis as at Jan 11, there were two transactions at One Shenton last month. The most recent transaction was the sub-sale of a 1,098 sq ft two-bedroom apartment on the 37th floor for $2.53 million ($2,300 psf).

Just one floor below, a 1,130 sq ft, two-bedroom unit changed hands for $2.6 million ($2,280 psf). The previous owner had bought it for $2.3 million ($2,021 psf) in August 2007, hence making a 12.8% gain.

Designed by world-renowned architect Carlos Ott, the twin-tower landmark project located on Shenton Way is built on a retail podium. There are 341 units of one to four bedroom apartments and penthouses in two towers of 42 and 50 storeys. The project is a redevelopment of City Developments Ltd (CDL)’s former Robina House commercial building. The developer currently has less than 20 units available for sale, mainly large three- and four-bedroom apartments on the high floors.

When One Shenton was launched in January 2007, the units were sold at an average price of $2,000 psf. The highest price achieved in the condominium so far was in June 2007, when a 1,894 sq ft four-bedroom unit changed hands for $5.2 million ($2,757 psf).

TANJONG PAGAR

Another new condo in the vicinity, the 312-unit The Clift, was launched in the middle of 2006, and the average price then was $1,107 psf. Completed in January 2011, the 43-storey The Clift by Far East Organization (FEO) is the second of three inner-city residential projects by FEO located in the Tanjong Pagar area. The first was the 646-unit Icon on Enggor Street, which was launched in 2003 following the SARS outbreak and completed four years ago.

The Clift, located on McCallum Street, is a redevelopment of the former Natwest Centre, and is just across the road from the Amoy Street Food Centre as well as a short walk from the Tanjong Pagar MRT station. The third project developed by FEO in the area is Altez, a 62-storey apartment tower comprising 280 units located in front of Icon.

In December, there were at least six transactions at The Clift, based on caveats lodged with URA Realis as at Jan 11. Transacted prices ranged from $2,100 to $2,275 psf, still nowhere near the $2,347 psf achieved for a 527 sq ft one-bedroom unit that changed hands in a sub-sale last August, or the $2,794 psf achieved when a 753 sq ft one-bedroom loft was sold by the developer at the same time for $2.11 million.

The most recent transaction was the subsale of a 775 sq ft, two-bedroom unit on the 21st level for $1.6 million ($2,100 psf). Prior to that, a 495 sq ft unit eight floors above was transacted for $1.1 million ($2,242 psf). The seller purchased the unit from the developer in August 2007 for $1.1 million ($2,199 psf), making a 2% gain in four years.

According to Jason Chen, a property agent from DTZ Debenham Tie Leung, the asking prices for One Shenton and The Clift are now comparable. Even in terms of asking monthly rental rates, they are comparable, with one-bedroom units going for $4,000 to $4,300.

With new condos such as The Clift and One Shenton fetching prices of $2,100 psf and above, some investors are gravitating towards older condos in the area, where prices are hovering around $2,000 psf or below, notes Chen. The 45-storey, 168-unit Lumiere by niche developer BS Capital was completed in August 2010. Asking prices of units in the condo tower located on Mistri Road that is a redevelopment of the former HMC Centre range from $1,700 to $1,900 psf for units on the lower floors, says Chen.

The most recent recorded transaction at Lumiere was for a 657 sq ft two-bedroom apartment on the 25th level, which changed hands for the third time for $1.4 million ($2,086 psf), according to a caveat lodged with URA Realis on Dec 12. The first owner purchased the unit from the developer for $1.1 million ($1,608 psf) in December 2006 and sold it four years later for $1.3 million ($1,917 psf). Hence, he made a 19.2% gain. The recent seller, on the other hand, enjoyed an 8.1% price appreciation when he sold the unit for $2,086 psf.

Over at Icon, which was completed in 2007, there were two caveats lodged with the URA Realis last month. Transacted prices at Icon ranged from $1,768 to $1,924 psf. At the neighbouring Altez, 190 units were sold as at end- November. The most recent transaction was for an 861 sq ft two-bedroom unit on the 40th floor, which was sold for about $2.25 million ($2,612 psf) last September.

MARINA BAY

In the Marina Bay area, at the 428-unit Marina Bay Residences, there was a sole transaction in December (based on caveats lodged with URA Realis). A 732 sq ft one-bedroom unit was sold for $1.8 million ($2,480 psf) in the resale market. The previous owner had paid $1,800 psf in 2007. The original buyer had purchased it for $1,598 psf in January 2007.

Marina Bay Residences was completed in 2010 and the record price achieved in the development was $4,368 psf last April, when a 2,368 sq ft four-bedroom apartment on the 46th level of the 55-storey tower was sold for $10.34 million. The previous owner had paid $3,500 psf for the unit just a year earlier, in March 2010.

Meanwhile, at the 1,111-unit The Sail, there were four caveats lodged with the URA Realis on Dec 5 and the transacted prices ranged from $1,840 to $2,200 psf. Prices are nowhere near the record price of $3,499 psf achieved last September, when a 1,033 sq ft two-bedroom unit in the twin-tower development changed hands for more than $3.6 million. The previous owner paid $2,049 psf for the unit in 2007.

Are the prices achieved in the CBD today indicative that they are likely to soften? Property agents are unconvinced that that prices will fall further or “fire sales” will take place. “The prices may be far from the all-time high, but this is to be expected, given the new measures introduced by the government and the current economic outlook,” says Huttons’ Ng. “Prices will definitely drop, but they are very unlikely to fall much further, as investors who have paid a premium for their units would rather hold on to them until the market picks up.”from 3.5% to 4%.